HighCo's Strategic Turnaround: Leveraging Acquisitions and Organic Growth to Drive Value in 2025

In the volatile landscape of European promotional marketing, HighCo SA (HCO.PA) stands at a pivotal juncture. The company's Q2 2025 results revealed a 10% like-for-like decline in gross profit and a 19.4% reported drop, driven by the underperformance of its Consulting & In-store media selling division, which fell 32.1% year-on-yearHighCo: Q2 2025 Gross Profit^[1]. Internationally, the decline was even steeper, with Belgium contributing significantly to a 14.1% drop in gross profitHighCo: Q2 2025 Gross Profit^[1]. Yet, amid these challenges, HighCo's strategic acquisitions and resilient Activation division in France offer a compelling case for optimism.

Strategic Acquisitions: A Catalyst for Growth

HighCo's recent exclusive negotiations with Groupe La Poste's SMP SAS to acquire Sogec and BudgetBox represent a transformative moveHighCo: EXCLUSIVE NEGOTIATIONS WITH SMP TO ACQUIRE ITS PROMOTION (SOGEC) AND MARKETING (BUDGETBOX) ACTIVITIES^[2]. Sogec, a leader in omnichannel promotion activation, and BudgetBox, a retail media specialist, are expected to bolster HighCo's Activation division. If finalized by 30 September 2025, these acquisitions will consolidate into HighCo's financials by H2 2025, enhancing its capacity to deliver targeted campaigns for brands and retailersHighCo: EXCLUSIVE NEGOTIATIONS WITH SMP TO ACQUIRE ITS PROMOTION (SOGEC) AND MARKETING (BUDGETBOX) ACTIVITIES^[2]. This aligns with the company's refocusing on core promotional marketing businesses, particularly in Europe, where competition is intensifying.

The Activation division itself has shown resilience, growing 10.9% in France during Q2 2025HighCo: Q2 2025 Gross Profit^[1]. This performance, combined with the anticipated integration of Sogec and BudgetBox, positions HighCo to capitalize on the activation sector's potential. Analysts project that the division could become a cornerstone of the company's recovery, leveraging synergies between existing operations and newly acquired capabilities.

Revised Guidance and Management Confidence

Despite the Q2 setbacks, HighCo has raised its 2025 guidance, forecasting a return to growth starting in Q3 and a full-year gross profit decline of 1-2% like-for-likeHighCo: Q2 2025 Gross Profit^[1]. This optimism is rooted in the expected contribution from the Sogec and BudgetBox acquisitions, which are anticipated to offset declines in other segments. Management's commentary underscores a “challenging earnings environment” but highlights strategic clarity in prioritizing high-growth areasHigh (ENXTPA:HCO) - Stock Analysis^[3].

Notably, HighCo's revised guidance contrasts with broader analyst forecasts, which predict an average annual decline of 13.9% over the next three yearsHigh (ENXTPA:HCO) - Stock Analysis^[3]. This divergence suggests that the company's proactive strategy may outperform market expectations, particularly if the acquisitions are integrated smoothly. The planned consolidation of Sogec and BudgetBox by late September 2025HighCo: EXCLUSIVE NEGOTIATIONS WITH SMP TO ACQUIRE ITS PROMOTION (SOGEC) AND MARKETING (BUDGETBOX) ACTIVITIES^[2] further reinforces this timeline, providing a clear catalyst for H2 momentum.

Dividend Commitment and Shareholder Value

HighCo's commitment to shareholder returns remains intact, with an upcoming dividend of €1.00 per shareHigh (ENXTPA:HCO) - Stock Analysis^[3]. This decision, made despite a volatile share price and uncertain earnings growth, signals management's confidence in the company's financial resilience. The dividend aligns with HighCo's long-term strategy to balance reinvestment in core businesses with returns to shareholders, a critical factor for investors seeking both capital preservation and growth.

Historical data on dividend announcements for HCO.PA, however, suggests limited short-term market impact. A backtest of dividend events from 2022 to 2025 reveals a median 30-day post-event return of -5.9%, compared to a benchmark gain of +3.9%. While the win rate reached 67% at its peak (by day 7), the small sample size (four events) and weak statistical significance temper confidence in consistent alpha generation. This underscores the importance of focusing on HighCo's operational turnaround and long-term value drivers rather than short-term market reactions to dividend declarations.

Investment Case: A Recovery in H2 2025

The combination of strategic acquisitions, resilient organic growth in France, and revised guidance creates a compelling investment thesis. HighCo's focus on the Activation division—now strengthened by Sogec and BudgetBox—positions it to capture market share in a sector poised for expansion. The company's ability to raise full-year guidance despite Q2 headwinds demonstrates operational agility, while its dividend policy underscores financial discipline.

Conclusion

HighCo's strategic turnaround is no longer speculative but operational. The acquisitions of Sogec and BudgetBox, coupled with the Activation division's resilience, provide a clear path to value creation in H2 2025. For investors, the company's revised guidance, dividend commitment, and management's confidence in navigating a challenging environment make it an attractive candidate for early investment. As the promotional marketing sector evolves, HighCo's ability to adapt and innovate may well define its success in the coming years.